Douglas
J.
Schmidt

Doug is a member of the Financial Services & Capital Markets industry team and the leader of the firm’s Insurance and Professional Liability sector. For more than 20 years, he has handled cases involving most aspects of litigation involving directors, officers and professionals. He has prosecuted and defended a number of cases relating to insurance coverage and bad faith issues and often consults with clients with regard to their insurance coverage issues. He has also defended merger targets and its directors and officers in the litigation that ensues following the announcement of the sale of a public company.

A certified insurance receiver, Doug has broad experience as general and special counsel to the receivers of insolvent or financially troubled insurance companies. He has handled all aspects of receivership, including initial appointment of the receiver, claims resolution, reinsurance collection, transfers of blocks of business and marshalling and distribution of assets.

Doug has also investigated numerous claims and coverage disputes involving insurers, reinsurers, accountants, lawyers, actuaries and claimants. He has resolved outstanding issues through litigation to final adjudication or negotiated settlement, commutation or recapture agreements.

Doug has prosecuted and defended claims involving failed transactions, breach of contract and breaches of duty by directors and officers, reinsurers, brokers, accountants, lawyers and other professionals. Clients often call upon him during emergency and time sensitive situations to help ensure transactions are completed and prevent disastrous economic consequences. Doug has also prosecuted federal income tax refund claims for insolvent life insurance companies in federal district courts and circuit courts of appeal, and litigated various other issues against the federal government.

Select highlights of recent experience include:

While representing Liquidator of first insolvent Health Insurance Cooperative established under the Affordable Care Act (ACA) had to and continues to address numerous issues of first impression with regard to the ACA and HHS, CMS and DOJ.

Defended target public company and its directors and officers against class action filed following the announcement of the acquisition of the public company. Settled with additional disclosures the morning of injunction hearing notwithstanding significant conflict allegations and less than unanimous Board approval.

Freezing more than $40 million in foreign accounts and repatriating those funds back to the United States on behalf of insolvent insurance companies.

Recovering in excess of $250 million on behalf of insolvent insurance companies from reinsurers, lawyers, accountants, directors and officers, other professionals and financial institutions.

Doug is a member of the Executive and Partner Boards.

Professional Associations and Memberships

International Association of Insurance Receivers

The Missouri Bar

Awards and Recognitions

Benchmark Litigation, Local Litigation Star, 2010

Martindale-Hubbell AV Preeminent

Missouri & Kansas Super Lawyers, Business Litigation, 2012-2016

Experience

Served as general and special counsel to numerous Supervisors, Rehabilitators and Liquidators of troubled and insolvent insurance companies, including Liquidator of first insolvent Health Insurance Cooperative under the Affordable Care Act.

Defend target public companies and their directors and officers against class action brought following the announcement of sale of the company.

Obtained settlement (in excess of policy limits) from insurance carriers for directors and officers of an insurance franchisor. Also reached an agreement with the directors and officers to prosecute claims against the broker for a gap in coverage.

Froze in excess of $40 million in foreign accounts and repatriated those funds back to the United States on behalf of insolvent insurance companies.

Served as counsel to the rehabilitator of a mutual company that was saved from liquidation by a unique arrangement in which the guarantee association agreed to indemnify a party that contributed $17 million in capital to the company via a surplus note. After the rehabilitation plan was approved, agents sought an injunction against the company that would have derailed the rehabilitation and put the company into liquidation. All issues resolved, and the company came out of rehabilitation.

Recovered in excess of $250 million on behalf of insolvent insurance companies from reinsurers, lawyers, accountants, directors and officers, other professionals and financial institutions that caused damage to the companies.

Served as counsel to the supervisor with regard to the sale of a large life and annuity company that was financially troubled. A sale of the company was negotiated where the guaranty association was to put up funds sufficient to create an auction of the company, but with the possibility of competitive bidders, the purchaser agreed to acquire the company without the guaranty association’s involvement.

Obtained a professional malpractice policy limits settlement against an accounting firm for its malpractice with regard to its audit of a publicly traded company and affiliated companies — without filing a lawsuit.

Developed and completed a unique closing process for the estate of an insolvent insurance company in which the company had been in liquidation for 10 years but could not close because of potential IRS and federal government claims. Closed the estate and paid all policyholders and the guarantee association in full. Also paid $20 million to unsecured creditors while retaining a reserve for potential IRS and federal government claims.